Councils pressed to transform despite limited resources

By Dylan Bushell-Embling
Monday, 10 July, 2017

Limited resources and a lack of skilled staff are holding back councils’ IT plans.

Australia’s local councils are under increasing pressure to modernise their operations and improve online service delivery for residents, but many are starved of the funds and skills needed to achieve those goals.

These are among the key findings of a report from IBRS into local government IT management. The report — ‘Winds of Change Also Sweeping Local Government’ — found that local government IT leaders are grappling with demands to simultaneously improve online customer-centric service delivery while reducing operating expenses.

Adding to this pressure, councils are faced with rate capping legislated by state governments, requirements to comply with IT security and procurement guidelines, and pressure from state governments to merge to achieve economies of scale.

But a survey found that the IT management staff of many councils lack the funds needed to replace ageing legacy systems because they must compete with business managers and councillors for limited resources.

Small regional councils in particular also typically invest significantly less in IT as a percentage of revenue than their peers in the cities. While average IT spending as a percentage of gross revenue among councils was 3.5%, spending by smaller councils was consistently below average, with one small council surveyed spending just 1.5% of gross revenue.

Smaller councils also often struggle to improve online services because the skilled staff needed to develop them are often reluctant to relocate from capital cities, and the councils cannot pay salaries comparable to those earned in the major cities.

The shortage of skilled staff is not confined to regional areas, with demand for skilled IT professionals sector-wide outstripping supply, particularly for specialists such as business analysts, project managers, solutions architects and security analysts.

Business analysts top the list because they are needed to support councils’ digital transformation and legacy systems replacement initiatives. Some councils have allocated extra resources for such transformation initiatives, but not all.

Over the next five years, additional skills are expected to be required in areas such as data analytics, AI, machine learning and the Internet of Things (IoT).

The skills shortage is being compounded by a reluctance among councils to pay the costs required to upskill existing staff. One large regional council has bucked this trend and addressed the shortfall in the supply of business analysts by recruiting librarians and training them for this role. IBRS is advising other councils to consider following suit.

The report, authored by IBRS advisor Alan Hansell, also recommends other ways to improve councils’ IT capabilities, such as cross-training of existing IT staff or assigning them to HR departments or to senior management to help them gain valuable insights into the workings of council. Skills enhancement events, coaching or mentoring programs and outplacements can also help build capabilities.

IBRS’s survey meanwhile found that the IT literacy of business managers was considered to be low, and that this was frustrating councils’ digital transformation initiatives.

But councils are exploring methods to improve IT literacy, such as seminars designed to introduce staff to new technologies and digital approaches, as well as application systems training covering the use of mobile devices in the workplace.

Top priorities

IBRS’s survey found that providing a secure environment is IT management’s top priority, with email security a major concern. But councils face an inability to hire qualified security professionals, and so must often rely on managed security service providers.

Enabling the digital transformation of business processes ranks second, with respondents often reporting that the strategic mandate to transform is lacking at the council or executive level.

IBRS said the best way to achieve this mandate will depend on the individual council. For some, elected officials must be convinced that digital transformation will improve outcomes for ratepayers, while for others the executive may need to be convinced that the cost of council services will be reduced.

Implementing business solutions on time and within budget was ranked as the third highest priority overall, with project managers considered to be lacking skills and unable to implement solutions on time.

IBRS advised that project managers in local councils must be multiskilled and learn how to handle the bureaucracy of government. This can be achieved by engaging a skilled mentor such as a retired manager to advise project managers on how to construct management reports, hire staff and make procurement requests.

Ranking equal fourth are integrating software and services with major systems — an ongoing challenge considered to be critical to service delivery — and justifying the value of IT to council members while competing for funding within the council’s operational demands.

Reducing costs was considered a lower priority, with management now emphasising delivering quality services, and seeing IT as a way to improve that quality and the efficiency of these services.

Smaller councils rated attracting and retaining skilled IT professionals as a high priority due to the difficulties they face in doing so.

Meanwhile, managing a responsive IT infrastructure and network was rated only a medium priority, with infrastructure increasingly being viewed as a commodity rather than a speciality.

Likewise, taking advantage of the cloud was only a medium priority, with many respondents stating that they are waiting for cloud technologies to mature and operating costs to decrease before making the transition to the cloud.

IT and business partnership

IBRS’s survey also found that IT management is considered to have the main responsibility for driving digital transformation within council, followed by the executive. A number of councils report that the executive is working with IT management or both IT management and business management on digital transformation.

The report recommends that councils develop a program designed to transform not only IT solutions but also business processes.

At a minimum, such a program should identify “quick win” improvements such as: updating existing systems; securing the IT resources and capabilities required to achieve these quick wins; automating applicable business processes with commercial-off-the-shelf systems or by engaging major vendors; initiating the development of an IT strategic plan; and presenting a business case for the transformation program based on this plan.

Achieving these goals will require a closer partnership between IT and business management.

Councils’ IT management are exploring a variety of approaches to strengthening ties between IT and the business. These include consulting widely before making strategic IT-related decisions and seeking approval for IT management to give presentations on hot topics for the CEO and board.

Other approaches found to be successful include convincing IT staff that they are enablers instead of systems owners, engaging business management in systems development as early as possible in the life cycle of a project, and helping business managers understand what IT can and cannot deliver.

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